What is a debt-to-income ratio?
Debt-to-income ratio (DTI): Your debt-to-income ratio (DTI) compares your monthly debt payments with your gross monthly income. Lenders use it to judge how much more debt you can manage.
To estimate it, add up your monthly debt payments, such as loans, card minimums and rent or a mortgage, and divide by your monthly income before taxes.
Each lender sets its own DTI limits, and they vary by loan type. Paying down balances or increasing income lowers your ratio.
When you compare offers
Knowing your DTI helps you see whether a new monthly payment would fit alongside what you already pay.
Related guides
- What to Check Before Comparing Personal Loan Offers
A checklist of what to have ready before comparing personal loan offers, plus how prequalifying with Lendara is designed to use a soft pull.
- How to Prepare to Qualify for a Small Business Loan
Practical steps to get ready before you apply for small business financing: what to check, which documents lenders commonly ask for, and how to compare offers once you have them.
This glossary is for general educational purposes and isn't financial, legal or insurance advice. Lendara is not a lender and does not make credit decisions. Lendara is a free online marketplace that connects you with participating lenders and providers, who set their own eligibility rules, rates, fees and terms. Lendara may receive compensation from partners, which may affect which offers appear and their order.